Archives: Featured Articles

(Originally published 31 August 2023 at everland.earth)

The stakes are too high for forests and communities.

Robust science is built on thorough investigation and rich, diverse debate. Without these fundamental ingredients, we have little hope of achieving an equitable path towards ending deforestation or fighting climate change.

We welcome Calyx’s perspective on our analysis of REDD+ baselines, which explores critical questions about the REDD+ mechanism that should help guide its future as we work to scale it effectively and with the urgency demanded by the climate and biodiversity crises. What is concerning however, is the apparent un-tested ‘buy-in’ of West et al’s report by Calyx, and many others, without the robust scrutiny we would expect of a community of experts who are dedicated to having legitimately strong scientific foundations for our work.

We recognise that West et al’s paper has been peer reviewed and printed in one of the most prestigious journals on the planet. While we, as a community of experts, should be able to rely on that as a strong indication of the quality of the report, it is inherent to the culture and advancement of science to undertake critical reviews of published work. Our review indicates that this work has serious problems that fundamentally call into question the results.

West et al’s findings are based on serious methodological and analytical flaws, as well as data inaccuracies, miscalculations, and a misunderstanding of the fundamental drivers of forest loss and how REDD+ carbon crediting works. When that is accepted as robust science without proper scrutiny, everyone loses. But communities on the frontlines of the climate crisis lose the most.

Everland is preparing a detailed analysis of West et al at the individual project level, which we will publish in due course. However, in the meantime, we feel it is important to point out a few critical errors we have already identified in West et al’s approach.

5 Fundamental Flaws in West et al’s analysis

1. Basic mathematical error and over-simplified methodology: Inaccurate reporting of project baselines by the authors resulted in their use of significantly higher baseline deforestation rates for analysis than the projects actually operate under and generate avoided emissions in relation to. In one example, West et al appear to have made a basic error in their calculations that resulted in a significant overstatement of cumulative deforestation: While the actual cumulative baseline (2009-2018) reported in the Project Design Document for Madre de Dios REDD+ Project (ID 844) is 21,982.8ha, West et al mistakenly added together the cumulative baseline deforestation numbers for each year – resulting in an inaccurately reported value of a value of 125,501ha. Furthermore, in estimating the project emissions reductions, rather than using the verified values, the authors calculated the emissions reductions themselves using an over-simplified method. This resulted in an overestimation of the actual amount of emission reductions the majority of projects have been credited with. On average, this oversimplification created an overestimation of verified emission reductions of nearly 1Mt of CO2e per project on average, with a total overestimation of >17.6 million tCO2e. Combined with the overstatement of project baselines, this significantly exaggerates the climate impacts that REDD+ projects are actually credited for, undercutting the validity of West et al’s conclusions.
2. Omission of highly material factors: The authors used a number of variables to identify potential ‘control’ areas that are statistically “similar” to a project area. However, they failed to include four key predictors of deforestation risk; road networks, navigable rivers, population density and proximity to previous deforestation. The authors also failed to account for other critical factors in predicting deforestation rates, comparing projects established in areas that would otherwise be 100% logging concessions to areas with no logging concessions. In another example, two project areas in West et al’s research were located in areas with 0% protected area coverage, but were matched with control areas where more than half the land was covered by legal protection. Deforestation in protected areas is typically much lower than in adjacent unprotected forests. These are highly material omissions that necessarily skew the data towards incorrect conclusions. No doubt this is precisely why the VCS standard requires projects include key indicators that have been missed by West et al.
3. Misunderstanding of deforestation risk: Furthermore, the authors failed to weight their variables based on the relative risk they pose to deforestation within the context of a specific project. In other words, they failed to account for the specific factors driving deforestation for a given project. As a result, in the majority of cases the project is surrounded by more extreme deforestation than the selected control areas, meaning they’re at greater risk of imminent forest loss. Failure to understand the specific local context underlying deforestation risk is a failure to recognise the foundational baseline scenarios and theory of change underlying REDD+ interventions.
4. Inadequate data: West et al’s analysis uses open-source geospatial data (Hansen et al 2013) in selecting control sites, validating their model and estimating verified emission reductions. This dataset is known to be highly uncertain in some key areas, including  Sub-Saharan Africa (error: ±79%) and the Democratic Republic of the Congo (error: ±65%) (Tyukavina et al. 2015). Projects are required to use far superior geospatial imagery and on-the-ground verification for baseline setting and monitoring, and account for data error where it exceeds 15% by reducing the number of credits it can issue. Using inadequate data creates an apples-to-oranges comparison that cannot be relied on as robust science. And no discerning buyer would consider this to be robust due diligence.
5. Lack of transparency of control areas: The authors did not map or otherwise indicate where the selected control areas were in relation to the project areas, providing no way to evaluate the extent to which they are located within socio-economic and biophysical regions that are similar to the project areas. This is required by the VCS standard when project developers select and propose a Reference Area as a control as part of the project validation, which is then independently audited. Without this level of transparency, it is impossible to independently verify the reasonableness of the control sites, which is the underpinning of the study’s methodology and findings.

The flaws in West et al’s approach are so fundamental we do not believe that this study can rightly be classified as ‘robust science’. As an industry, we have a duty of care to ensure we adapt and evolve our standards and methodologies in line with robust, best-in-class scientific findings. This is critical to ensure REDD+ projects continue to work as an effective tool against deforestation.

And that means we have to apply the appropriate level of rigor in evaluating which scientific findings should shape the future of REDD+, and which should not. If we get this decision wrong the implications for communities on the front lines of the climate crisis and our ability to end deforestation globally are both real and disastrous.

(Everland will publish a detailed analysis of West et al in due course.)

Please note this article was originally published by the World Economic Forum: https://www.weforum.org/agenda/2023/08/voluntary-carbon-markets-nature-based-solutions-climate/

24 August 2023 | The best available science makes clear the devastating impacts if global average temperatures surpass pre-industrial levels by more than 1.5°C. However, it is widely agreed that avoiding this scenario is not achievable without sustained and rapid industrial decarbonization.

It is also widely agreed that we need nature-based solutions (NbS), which can provide up to 30% of the mitigation required by 2030 in order to keep the 1.5°C target in reach. NbS are a collection of nature-based approaches that both reduce and remove emissions, such as avoiding emissions through protected landscapes to limit deforestation or restoring ecosystems for carbon removal from the atmosphere.

Some good news is that we have a powerful tool at our disposal that can mobilize private sector finance and channel it toward NbS in the Global South, which is where it is most needed. That tool is the voluntary carbon market – where companies or individuals can buy carbon credits as part of their own plan to meet their climate goals.

The solution isn’t perfect. In fact, the market has come under increasing scrutiny. As we wrote earlier in the year, when we outlined five reasons why forest carbon credits are critical to climate action, the fact is that we won’t achieve our global climate targets without nature, and we won’t protect and restore nature at the scale required without carbon markets.

Here’s the simple truth. As companies work toward net zero, they will continue to put greenhouse gas emissions into the atmosphere.

Voluntary carbon market to help address emissions

The voluntary carbon market is currently the most effective way for them to address these emissions by mobilizing billions of dollars in private sector finance every year – and also helps make up the $4.1 trillion financing gap in nature by 2050. Such finance is additional to that pledged by national governments.

The value of the global voluntary carbon market topped $1 billion for the first time in 2021 and could be worth between $5-30 billion per year by 2030, with perhaps two thirds of this channelled into nature-based solutions, filling existing gaps in climate finance for nature.

However, in the last three years, only 1.2% of the annual cost effective potential of NbS has been unlocked by the voluntary carbon market.

One of the barriers is that far too often the use of carbon credits – and NbS carbon credits in particular – have been framed as an ‘either/or’ proposition. This implies companies think they can either invest in them or fund the decarbonization of their operations.

But the truth is it’s now too late to choose one or the other. Adopting a single approach is not enough to solve the twin crises of nature loss and climate change. This is why climate science is now demanding a ‘both/and’ approach – that is, simultaneously investing in internal reductions and NbS credits.

What is encouraging is that leading companies understand this “both/and” approach, and are publicly committed to it. In addition, recent research has further shown that companies that purchase a material amount of carbon credits on average reduced their emissions faster than those who have not.

High-quality carbon credits are essential for integrity

It is also key to recognize that high-quality carbon credits are essential to creating a high-integrity voluntary carbon market. The good news is that initiatives like the Integrity Council for the Voluntary Carbon Market which are aiming to forge a clear path forward towards higher integrity, greater transparency and overall more consistency in the marketplace.

While it’s clear that there is still much work to do on this front, the good news is that recent recommendations issued by civil society, such as the Tropical Forest Credit Integrity guide and the NCS Alliance’s Buyer’s Guide, offer clear guidance that companies can turn to in the interim.

What does all this counsel have in common? Purchasing carbon credits through the voluntary carbon market is not an alternative to rapid decarbonization within value chains.

Rather, high-quality carbon credits are a way for companies to support a range of critical mitigation efforts outside of their value chains, including the potential to channel billions of dollars into NbS that would not receive funding otherwise.

In the future, NbS carbon credits must improve in line with this new science and guidance, updated methodologies and evolving technology.

Voluntary carbon market to accelerate climate action

When investments are made with due diligence, high-quality NbS credits will ensure that emissions reductions or removals happen, that nature is being protected or restored, and that communities are not only receiving benefits, but are also active participants.

There’s the potential for the voluntary market to do so much more, if we let it. Failure of the market now would slow humanity’s path to net-zero emissions and derail financial innovation in other ecosystem services.

Climate change and nature loss are crises and inaction is not an option. The voluntary carbon market is critical for climate action and major progress has been made to improve outcomes – with many more improvements already under way.

Now is exactly the time to invest in nature-based solutions through the voluntary carbon market, alongside other immediately deployable climate solutions, so we can ensure a better future for the planet.

 

The webinar slides and recordings are available in the links below in both English and Spanish.

Webinar recording (English version):

Webinar recording (Spanish version):

Webinar slides (English version):

The answers to audience questions from the session are provided in the text below:

General

Just wondering, are VCMs a real solution to climate change? looking at how climate change impacts tourism, there’s need for more effective efforts to that than just counting on business consciousness.

Absolutely there needs to be more than just the VCM, which is why approaches like SBTi are critical in ensuring that companies are doing real reductions within their own business. The VCM should only be used to complement real, ambitious and significant internal corporate emissions reductions.

Is there space for simplification of the A6 system? it seems incredibly complex and invites for further caution to trade…

Unfortunately… probably not. Article 6 represents an agreement by all countries in the world; it’s always going to be complex and difficult to interpret, solely from the fact that it stems from a negotiation text first and foremost.

I would be interested to hear from speakers how transparency of financial flows can be ensured in Article 6 + VCM implementation. There is legitimate concern that revenue generated from natural resources that are publicly owned are disappearing into private pockets or misappropriated corruption. Part of the concern is also due to the lack of obligation on part of project developers to conclude benefit sharing agreements.

I agree that we need more transparent financial flows. Additionally, we need better guidance and rulesets around benefits-sharing best practices (which is why we wrote a report about that!). I would also agree that we need to reduce any potential risk of corruption – unfortunately I have tried to conduct some research around corruption but it’s hard to find lessons learned or best practices, because corruption is the opposite of transparent. But agree that we need to figure out ways to minimize this risk.

Considering that countries are going to set the rules, how we Should Manage future volumes, we need to wait till new rules? Or we can set agreements on future volumes. Also if I have vintages 2021 and 2022 should they be considered on this new rules? Or only the vintages from the New rules and so on?

No easy answer here, unfortunately. I think most investors and developers have not decided to wait because there is no clear timeline for when some of these rules will be made. But there remains a risk, so it is up to each organization to figure out how much to wait or try and create contingencies to address these potential risks.

India is developing its own carbon market how it it going to affect the other international carbon market?

If it’s a domestic market, it won’t affect the Article 6. The only thing that might be impacted is overall supply and demand across different markets; at the moment, India is a large supplier for CDM and the VCM markets, but if more companies are purchasing credits domestically, that might mean VCM supply from India decreases. But maybe not – it all depends on a lot of market factors (for example, if the VCM pays more than the domestic Indian market, then maybe Indian project developers will still prefer to sell internationally)

TNC

Where do you expect to see data on trades once these are finally executed?

All Article 6 trades must be reported in the Article 6 database, found here: https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement/cooperative-implementation/centralized-accounting-and-reporting-platform#Submitted-initial-reports-and-updated-initial-reports. At the moment, there is only one submission, but that will change as more countries begin to trade.

Where do Switzerland’s transactions fit in this picture?

Sorry, I’m not sure which slide this comment is referring to. But we do include a summary of Switzerland’s approach to Article 6 on page 31 of this report: https://www.nature.org/content/dam/tnc/nature/en/documents/TNC_To_Trade_or_Not_to_Trade_150523.pdf

How would you distinguish Article 6 vs VCM credits?

Article 6 credits are those approved by governments under Article 6.2 bilateral agreements or by the Article 6.4 Supervisory Body. VCM credits are those approved by VCM standards, like ART, ACR, CAR, Plan Vivo, Verra, Gold Standard, etc. At some point, we may see countries using VCM standards as part of the Article 6.2 trades OR we may see the Article 6.4 Supervisory Body recognize some VCM methodologies as eligible for 6.4. But at the moment, there is not much overlap.

How do you see the role of exchanges like Xpansiv helping/hurting the VCM?

Sorry, I don’t have a lot of views on this – my primary focus right now is on tracking Article 6.

Kelley, in your view who pays for the 20% buffer in the case of Indonesia? If on the VCM buy side, is it conceivable that we may see an adjusted (higher) price floor?

I’m not sure – the Indonesian legislation is only written in Bahasa, and so I was using Google translate when reading it. My impression is that the project developer would submit the credits to the buffer, but I would not be surprised if that then drives up the price of credits that project developers are willing to sell at.

Can you please help to understand, does the additional regulation in Indonesia set a cap on all carbon credits internationally, or only those that will decrease the Indonesian NDC?

All credits being sold from Indonesia will have to contribute to the buffer. Credits from activities covered by the NDC must contribute 10-20% to the buffer; credits from activities outside the NDC must contribute at least 20%.

When we say REDD+ included in Article 6, does it mean VCM or UNFCCC REDD+?

This is a great question, and I was being intentionally vague. I’m not sure, to be honest. In my opinion (and I could be wrong) I think both could be eligible. Article 6.2 is really up to countries to decide: so if a buyer country is okay with purchasing VCM REDD+, then I think that would be eligible. Ditto if a buyer country wanted to purchase UNFCCC REDD+. But this is my personal read on the negotiation text as it is currently written (which is quite open).

What considerations are there for say multinationals in ensuring there is not double counting of voluntary carbon credits?

Due diligence when purchasing a credit. But I think most of the onus will be on the VCM standards to ensure this, not multinationals.

How can project participants get CORSIA authorization for ITMOs issued by Article 6.2 mitigation projects?

Host countries give authorization for ITMOs, either under Article 6.2 or Article 6.4. Under CORSIA, host countries will also need to give authorization to any CORSIA-eligible credits wishing to get a corresponding adjustment (which wasn’t required for the initial phase of CORSIA but is required now, I believe). Project participants will need to contact their host country about authorization and this will change per country (see the case studies on page 25-28 for information on who gives authorization in various countries: https://www.nature.org/content/dam/tnc/nature/en/documents/TNC_To_Trade_or_Not_to_Trade_150523.pdf).

Which mechanism accept Article 6 REDD+ methodologies? GS or VCS or?

At the moment, there are not Article 6 methodologies. Under Article 6.2, seller countries essentially can create their own methodologies or could approve pre-existing methodologies under the UNFCCC or VCM standards. Under Article 6.4, the UN Supervisory Body will determine what methodologies are eligible and right now they haven’t approved any methodologies yet (so it’s too soon to say which, if any, REDD+ methodologies will be approved).

How did you evaluate the aditionality of the measures that coudl goes to A6?

Under Article 6.2 both the seller and buyer countries must conduct their own evaluation; under Article 6.4, the Supervisory Body will determine what tests are needed to prove additionality for all of their approved methodologies.

Can you elaborate a bit more why Indonesia decided to place a freeze on VCM exports?

My understanding (not living in Indonesia) is that the government was concerned about VCM exports limiting their ability to make claims around their NDC achievement. So they placed a freeze on exports while they worked on legislation to finalize the rules around carbon credit sales within and outside of Indonesia.

For countries that have issued “rules, guidance, etc.” what is range of treatment for existing VVM projects already operating in a given country?

o Option 1, Authorization required for VCM credits: Some countries may mandate that all carbon credits exported to international buyers – be it for voluntary or compliance purposes – must have a corresponding adjustment. The Bahamas’ Climate Change and Carbon Market Initiatives Act, 2022 requires this.

o Option 2, Authorization not required for VCM credits: Some countries may not mandate the use of corresponding adjustments for voluntary purposes. Ghana, for example, states that VCM projects do not need a corresponding adjustment but may request one, if the buyer wishes to have a CA.

o Option 3, Authorization not required, depending on the type of claim: Some countries may wish to require authorization for credits used by voluntary buyers for offsetting claims, while credits used towards “mitigation contribution” or “beyond value chain mitigation” (a similar concept defined by SBTi) claims would not require a corresponding adjustment.

o Option 4 – most countries have given any indication about which option they intend to use yet. J

What are the implications for project developers if CAs are to be required for a given country?

This could mean that project developers must get permission from the host country, if a CA is required for their project. Some countries may have easier authorization processes than others, and there could be a risk of corruption (which some project proponents experienced under the Clean Development Mechanism, which also required projects to get host country authorization).

India has announced project types under Article 6. What happens next? What can private sector do to move things forward from here?

Probably wait for more guidance unfortunately. I know India announced the eligible project types, but I’m not sure if the government has announced how they will authorize specific projects yet. Additionally, India will need to wait for the 6.4 Supervisory Body to determine which methodologies are eligible under 6.4. See page 22 for more details about the 6.4 process: https://www.nature.org/content/dam/tnc/nature/en/documents/TNC_To_Trade_or_Not_to_Trade_150523.pdf

Can a project that started before 2021 get correspoding adjustment and become an ITMO for credits issued after 2021?

ITMOs, by definition in the Article 6 text, can only occur after 2021. So credits before 2021 will not be able to become an ITMO. That said, some pre-2021 credits can be used by host countries (but not as ITMOs). CERs from CDM projects registered (not issued) after 2013 can be used for the first NDC compliance without a corresponding adjustment by the host country. However, these transfers will only occur until a date limit, which will be negotiated in the future. It is important to consider that CERs used toward 1st NDC are not considered ITMOs (Article 6.2 units). ITMOs by definition are generated in 2021 or later, whereas eligible CERs are from 2013-2020.

Gold Standard

What is Gold Standard’s view on Mitigation contribution claims , should ITMOs be prefered ? What happens retrospectively if a country does not allow export of carbon credits ?

Mitigation contributions are not necessarily correspondingly adjusted, while ITMOs traded would be. There are different uses for each, and there may be more demand for correspondingly adjusted units. If a country decides not to sell ITMOs it has generated, it may use it for other purposes, with consideration to any bilateral agreement it has entered into and the terms of it. Read more on our take on mitigation contributions here.

How can I know if my country is already a host country?

If it has announced its projects/sectors/activities will be participating in Article 6.

How and when can we access Investment Fund provided by Gold Standard?

Please see the details for the impact fund here.

Just to clarify, according to Gold Standard’s interpretation then any financing of a country’s NDC via the VCM would require authorization under article 6?

If a mitigation outcome generated is used for any purposes under Article 6.2, then it would need to be authorized to do so and become an ITMO. This ITMO can then be used for different purposes, including the VCM. However, this does not mean any financing for NDCs via the VCM require authorization.

What is the current status for GS credits issued from Zimbabwe, and what is the path forward for allowing the trade of Zimbabwe-based credits on the GS registry?

After the new regulations were released by the government on Friday, we are internally consulting on our next steps. The status has not changed since July.

Does GS plan to introduce IFM methodology for AFOLU projects?

Yes, IFM is an eligible category and we welcome submission of new methodologies by developers. There has not been a methodology proposal under consideration yet.

Does Gold Standard issue biodiversity and water credit other than carbon credits?

You can find information on our registries and credits here.

How is the carbon price set in bilateral cooperation projects?

It depends on the bilateral agreement and dictating clauses, if any. However, prices are set depending on the project. The host country decides to authorize the project/activity for the bilateral agreement trade considering all information they have (collected) on the project.

Is the early mover programme available on online to the public?

Yes, please find it here. The Programme was concluded in June 2023, and paves the way to our future work.

Can I assume that there are two types of GS credits; credits with corresponding adjustments and credits without corresponding adjustments? If a developer requests corresponding adjustment, who makes the request to the host country, the GS or the developer?

Yes. The developer makes the request to the host country.

Can you explain a bit more the term Domestic infrastructure?

To participate in Article 6, Governments may choose to develop/have in place their own domestic national infrastructure (e.g. registries), or use external third-party infrastructure, such as from the UNFCCC or standards such as Gold Standard. You can read this more in detail here.

Will the Gold Standard impose more stringent standards for issues such as historical baselines for REDD+ than are required by the UNFCCC rules?

Gold Standard does not issue standards for REDD+, and has not planned to issue such standards.

I think it is important to involve the private sector in the host country. Profit sharing will also be important. Will credits be shared with the host country? If so, does GS have rules in place? Also, what are your thoughts on SOPs?

This really depends on host country regulations, e.g. through share of proceeds of credits for administrative fees or national funds. Through our Registries Terms of Use, we are required to comply with national rules and regulations. Share of proceeds are necessary, but need to strike the right balance to ensure it does not disincentivize market activities.

North America capacity building:

Is there focus on capacity building for carbon markets in North America?

There hasn’t been as much focus on capacity building for Article 6 for Canada or the United States. However, that’s because most capacity building is focused on supplier countries and I haven’t heard Canada or the US mention any interest in selling carbon credits yet.

Article 6.4

When do we expect trades under Article 6.4 to start given how slow the enabling under UN has taken.

For the Article 6.4 mechanism to be up and running, a separate body called the Article 6.4 Supervisory Body needs to develop rules on methodologies, baselines, safeguards, guidance on removals, etc. Even if the Supervisory Body develops such guidance quickly, the countries need to “approve” them at COP28 in 2023, so the best-case scenario is that these trades begin to take place in 2024. Likely, the first methodologies developed will be adaptations from the CDM.

How exactly is Article 6.2 different from 6.4?

Article 6.2 is based on bilateral agreements, which provide countries with more flexibility to design their preferred rules and establish quality controls and safeguards, as long as they comply with the Article 6.2 guidance. Moreover, countries that aim to move quickly may prefer to use Article 6.2, as the Article 6.4 mechanism may take longer to be up and running. Also, Article 6.2 has no mandatory fees, while Article 6.4 has mandatory monetary contributions and automatic cancellations. On the other hand, establishing bilateral agreements under Article 6.2 comes with a transactional and political cost, which requires additional time and capacity compared to a more standardized mechanism. All units generated under Article 6.4 go through a centralized body with pre-approved methodologies, making the process and eligibility of these units more predictable. Lastly, the Article 6.4 framework is an update from the Kyoto Protocol’s CDM, so some countries could use an updated version of already existing infrastructure to engage.

Will there be a global registry for AR6.2 and 6.4?

There will be multiple registries. Article 6.2 will set up an Article 6 database where countries will report their trades. However, countries can use their own registry, another country’s registry or the Article 6.2 international registry (which still needs to be developed), so there will not be a single registry that countries must use. Instead the Article 6 database will provide a yearly snapshot of all trades across all registries (for 6.2). In contrast, Article 6.4 will have a centralized registry. The negotiators are still discussing whether the Article 6.2 database (with reports from the to-be-developed “international registry” or country registries) and the Article 6.4 registry will be able to transfer credits or if you can look at both dataset at the same time (the technical language here is around the “inter-operability” of the registries in the latest negotiation text.) Please read pages 20-22 for more detail here:

VCM guidance

What is the mandate for VCM guidance to set standards for demand-side? Will investor acceptance and uptake be the deciding factor as to whether any guidance sticks.

This is an open question. Standards could start to regulate demand-side activities, but I think most of the supply-side standards (Verra, CAR, ACR, Gold Standard, etc) don’t intend to. Instead I think demand-side standards like the Science-based targets initiative and VCMi are more likelyto provide regulation here. Then, as you mention in the comment, there may investor or buyer norms – these are different than requirements by standards, but are still powerful in shaping the VCM.

Re: Article 6 and Corresponding Adjustments in the VCM. Currently, most governments don’t even have a process in place for authorizations. VCM projects are selling credits and these are being retired by corporates for their ESG commitments (both within the country of the project’s origin and outside of it). Is the country where the projects originate ultimately responsible to account for VCM action that cannot be legitimately claimed in the country’s NDC? Should the default assumption not be that all VCM credits are ‘authorized’ – should the onnus not be on the government to make adjustments?

The default should not be that all credits are authorized. Authorization, by definition, requires a government approval. That said, there is a debate about whether authorization is needed for the VCM; for example, some people and organizations would say that a non-authorized credit is better for the VCM than an authorized one.

Corporates / SBTi / investment / buy side

What can the speakers tell us about the implications for corporate investment in nature-based solutions should the latest versions of the Science Based Target’s Initiative’s Beyond Value Chain Mitigation and Criteria & Recommendations for Near Term Targets be finalized as currently drafted?

I haven’t been following SBTi decisions recently, so I don’t have any comments at this time.

What is the incentive for corporates to invest in carbon offsets if they cannot obtain a corresponding adjustment and claim an offset?

I think there is currently a difference between a corporate claiming an offset and a corporate purchasing an offset with a corresponding adjustment. At the moment, corporates can make offsetting claims without a CA. If standards decide to change the claim and/or require a CA, then I do think more market research is needed to better understand why corporates would want to make a non-offsetting, non-CA claim.

If a company has several investments made to source carbon credits for reaching their Net Zero target (e.g. developed an afforestation project in sub-sahara Africa), and the host country its projects are located in is expanding their NDC to cover the activity of the project, would the company not lose the right to claim Net Zero through these credits?

Not at the moment, because currently VCM standards do not require these credits to have a corresponding adjustment. However, in the future, if a company wishes to buy credits with a CA and the host country is not on target to meet its NDC (or expands its NDC), then the corporate may not have the ability to purchase those credits with that claim. There is a separate interesting discussion here: what if a country agrees to make a CA for those credits, but then changes its mind because it is not on track to meet its NDC? The negotiators are discussing whether or not authorizations for a CA can be revoked or amended; these negotiations are not yet final, but will be important to watch in the future.

How can future-proofed strategies in this case be built that help companies hedge against future price increases and supply shortages under such a risk of force-majoure?

I think the first step is making sure companies realize there will be price increases and likely supple shortages. The VCM at the moment isn’t really working as intended – if the world was truly on the path to 1.5C, all of the cheapest abatement options should already have been done by now. We live in an imperfect world, so we still have a lot of “low hanging fruit” in terms of emissions reductions and removals, which is why companies are able to still buy offsets at <$10/t for the last few years. But that is not where the world is going. Companies should be using things like the social cost of carbon and other metrics to better predict where the market will head over the next decade.

How is Article 6 aligned with programs like the SBTi considering the ‘restrictions’ placed on carbon credit offsetting?

Article 6 is an agreement by all of the world’s countries – SBTi is a non-profit initiative that is trying to provide guidance to companies about what “ambitious” climate targets look like. They don’t overlap at all. The Article 6 negotiators are not looking to align anything with SBTi; if anything, it should and will be the other way around.

 

Authorization

Re. authorized vs. non-authorised transfer under Article 6 – my understanding is that the rules will be finalised at COP28 – is this the case and what will the negotiations cover if so? Will non- authorized transfer to private sector buyers be allowed, and will this lead to double counting?

Most of the rules have already been finalized. Additional rules around reporting and tracking of Article 6 trades still needs to be finalized. These might be finalized at COP28 but will *all* of the Article 6 rules be finalized at COP28? Probably not. Negotiators will always find something new to discuss. J As far as I know, the Article 6 negotiations will only regulate authorized or non-authorized Article 6 credits (ITMOs). They are not going to opine on VCM credits that have authorization for a CA (or not).

I’d like to know more about “No Authorization”.

Article 6 establishes countries’ right to authorize any credits for international trades under Article 6.2 or 6.4, or for “other international mitigation purposes” (OIMP). These other purposes include an umbrella of objectives, including use in the CORSIA, domestic markets, and the VCM. The decision of whether to require authorization, and thus a corresponding adjustment, for these other purposes is left up to individual countries and will likely lead to a variety of approaches dependent on specific country circumstances. Here are how countries are currently considering whether to regulate – or not – the VCM:

o Option 1, Authorization required for VCM credits: Some countries may mandate that all carbon credits exported to international buyers – be it for voluntary or compliance purposes – must have a corresponding adjustment. The Bahamas’ Climate Change and Carbon Market Initiatives Act, 2022 requires this.

o Option 2, Authorization not required for VCM credits: Some countries may not mandate the use of corresponding adjustments for voluntary purposes. Ghana, for example, states that VCM projects do not need a corresponding adjustment but may request one, if the buyer wishes to have a CA.

o Option 3, Authorization not required, depending on the type of claim: Some countries may wish to require authorization for credits used by voluntary buyers for offsetting claims, while credits used towards “mitigation contribution” or “beyond value chain mitigation” (a similar concept defined by SBTi) claims would not require a corresponding adjustment.

Providing authorizations and approvals for correspoding adjustments will require significant institutional/ procedureal and policy investments from host country governments. Some countries are also asking if this will be worth it. Thoughts?

Agreed, this will require a lot of thought. Any country that wishes to participate in Article 6 trading will need to figure this out, otherwise they cannot make an A6 trade. However, countries may wish to wait or see how others’ experiences are first – or countries may not wish to participate in Article 6 at all. These are all options.

Can the panelists give insight into how interested investors/buyers are in ‘mitigation contributions’ instead of an actual emission reduction unit? Is there a risk that by tightening accounting rules, we too tightly restrict credit transfers back to the private sector and kill growth?

I’m not sure. At the moment, I haven’t seen too many investors or buyers mention interest in this claim, but I also have seen many credits marketed with these claims either. I do think that is starting to change – I believe Myclimate and South Pole have both started to provide more restrictions around buyer claims of their credits, so it would be interesting to ask them about their experiences.

EU ETS

Will article 6 mean that some of the VCM projects will become equivalents of compliance credits like EU ETS for example?

No. Think of Article 6 as a new market, not a replacement for the VCM. Some VCM credits are eligible for compliance markets (like the Colombia and South African markets, for example) while others are not (VCM credits are not allowed in the EU ETS). In a similar way, some VCM methodologies may be accepted in Article 6.4 but many might not. These are all separate markets with separate rules.

Would article 6 credits be accepted in EUETS?

That is up to the EU to decide. They may allow all Article 6 credits (from 6.2 and 6.4) or they may reject or limit Article 6 credits. The EU ETS used to allow all types of credits under the UN’s Clean Development Mechanism, for example, but then started to limit credits to specific project types and locations as time went on.

Is it possible to transition credits from the VCM to the compliance market ? For example Voluntary credits from a non EU LDC to the be sold in the EU ETS ? If so, under which standards, and how ?

It could be possible but that is up to each compliance market to decide if and how any transfers can happen. At the moment, the EU ETS does not allow for any transfers from the VCM. Colombia, South Africa, South Korea and and Singapore do allow for some VCM credits into their compliance markets though.

 

Benefit sharing:

Some countries such as Zimbabwe and others are setting costs and benefits-sharing rules for VCM activities in-country without sufficient details on the mechanisms of benefits sharing or how costs will be levvied. This threatens to scare off VCM activities. Do the panelists have experience with such costs and benefits sharing rules and can provide insight on how they see it unfolding, and how investors will react?

This is a huge issue. I think it’s unsurprising more countries are trying to understand this space, but more work could be done to come up with solutions that don’t scare off VCM investment while ensuring more benefits remain on the ground. It’s a priority for TNC to work on but we don’t have any answers yet! If you have thoughts, please reach out to us – we are hoping to conduct some research on this topic in the fall.

 

NDCs

Re. the case of Ghana and selling ER units for conditional targets, does this mean that Ghana cannot fulfill its NDC, as they will make a corresponding adjustment for tranferred units generated under the conditional sector? Or how will they meet their NDC targets through the VCM?

This is a great question and one without a good answer. Ghana will meet its unconditional NDC target without selling credits. However, if Ghana makes a corresponding adjustments for credits from activities under their “conditional” target, then that might mean they don’t actually meet their conditional target because they are transferring those claims outside of the country. The reason this is so confusing is because “conditional” targets aren’t actually part of the Paris Agreement – countries came up with this idea but its not something ever envisioned by the Paris Agreement. The PA only wants targets (it doesn’t care if they are conditional or unconditional). I would guess Ghana is treated the unconditional target as the actual target, and thus isn’t worried about not meeting its conditional target because they already said that additional mitigation requires additional finance.

In reference to Latin American countries, at this point is it feasible for them to comply with the NDC?

In the current scenario it would be better to attract private investment to guarantee the sustainability of forests or improve production. Each country has made its own unique NDC, so I don’t know how feasible it is for each country in Latin America to meet their NDC. Theoretically, every country should meet their NDC and their NDC announcement usually has a lot of political and scientific considerations behind it – they aren’t made lightly.

What if the credits from a RE Project are not pledged towards the NDC?

You mean, if a VCM project is not part of a country’s NDC (and in this case, is an RE project)? At the moment VCM projects do not need a CA, so nothing would change until/unless VCM standards start to require something different.

How should countries make these decisions, where the NDC does not stipulate conditional/ unconditional targets/ activities?

That’s the big question. They will likely need to consider the risk of selling a credit now if they aren’t sure about meeting their NDC, and they will want to consider whether to restrict sales to specific sectors, prices, etc. There’s no easy answer here.

As regards countries waiting to see whether they are on track with their NDCs (and then deciding to trade), let’s not forget that BTRs, starting from 2024 will mean biennial NDC reporting, so they should know whether they are on track quite soon.

Yes, they should so we might see some more trades under Article 6, especially for those countries with a five-year (2025) target.

Will we see a convergence of voluntary and compliance markets moving forward?

Given that article 6 is likely to increasingly be impacted by Article 6 and NDC’s. I think so, but it likely won’t be a clean overlap. Some compliance markets may allow more overlap than others. It’s going to be a patchwork of various eligible rather than a single blanket approach unfortunately.

To what extent do you think the government’s involvement with VCM is successful currently?

Honestly I think most governments have not paid attention to the VCM until recently. I’m not sure I’ve seen any approaches that are super successful here but we are still in early stages of government involvement with the VCM in most countries.

How would you recomment Countries incorporate Short Lived Climate Pollutants into their Article 6 NDCs?

It depends on the country. A country could try to sell SLCP mitigation under an Article 6.2 trade, if they could find a buyer interested in purchasing it.

Corresponding Adjustment

What is the incentive for countries to require Corresponding Adjustments for both VCM and A6 credits?

I’m not sure yet. Some countries see this as an environmental integrity requirement – they would agreement with the argument that all credits (VCM or A6) need an adjustment. I believe the Bahamas falls under that category. But many countries haven’t taken a position on this yet.

How should voluntary market project developers account for the corresponding adjustments in the future? Enhance buffer account withholdings in the interim? Difficult implications for longer term financial feasibility …. more like guesstimations at this point. How can we overcome these risks and barriers to investment?

I’m not sure, but a few ideas could include better protections for yourselves and communities in any long-term contracts signed with buyers; making sure to engage with the host government whenever possible (though many governments don’t have clear opportunities for engagement here); and yes, maybe consider things like insurance or additional buffers. It’s a real problem and a real risk without great solutions at the moment.

Is a CA a adjustment on the amount of carbon credits that is counted/split towards the host country and buyer country like the Japanese system. or is the adjustment on the host country’s NDC itself?

Theoretically it will be an adjustment towards the NDC (through the biennial transparency reports) but I’m not sure how this will actually look in practice. Since we haven’t seen this actually happen yet, it’s difficult to say exactly how the adjustment will look.

If A6.4 will be replacing CDM, more like compliance market, will there be need for CA?

Yes, a corresponding adjustment is legally required for all Article 6.2 and 6.4 transactions (with some minor exceptions in 6.4 – read more here on page 17: https://www.nature.org/content/dam/tnc/nature/en/documents/TNC_To_Trade_or_Not_to_Trade_150523.pdf)

 

Register here/Inscríbase aquí:
https://us06web.zoom.us/webinar/register/WN_d48wc0ocQ1619kK24ahnFA

When/Fecha y hora: Wednesday, August 16th at 10:00 AM Eastern Time (GMT-4:00) / Miércoles 16 de agosto a las 10:00 a.m. Hora del este (GMT-4: 00)

La traducción en español se proporciona a continuación

This virtual Ecosystem Marketplace Insights Briefing will feature speakers from The Nature Conservancy, Gold Standard, the Voluntary Carbon Markets Integrity Initiative (VCMI) to discuss how governments are engaging with carbon markets, in response to increasing interest around both Article 6 and voluntary carbon markets. The webinar will explore the role project developers and host countries can play, as well as identify insights from current pilots and legislation from around the world. Speakers will discuss the key findings and trends from guidance, reports and programmes they have implemented on these topics, followed by a Q&A session with the audience.

Speakers:

• Kelley Hamrick, Senior Policy Advisory, The Nature Conservancy  
• Lydia Sheldrake, Director of Policy & Partnerships, VCMI 
• Kavya Bajaj, Government Relations Manager, Gold Standard
• Stephen Donofrio, Managing Director, Ecosystem Marketplace (moderator)
  

 

El próximo seminario web de Ecosystem Marketplace, como parte de la serie “EM Insights Briefings” de 2023, a desarrollarse este miércoles 16 de agosto junto a The Nature Conservancy (TNC), Gold Standard y la Iniciativa Voluntaria de Integridad de los Mercados de Carbono (VCMI).

Fecha y hora: Miércoles 16 de agosto a las 10:00 a.m. Hora del este (GMT-4: 00)

El seminario web contará con traducción en vivo en español para nuestros colegas de habla hispana que asistan al evento. La inscripción es gratuita y puede hacerlo dando clic en el enlace que está al final.

Los panelistas de las organizaciones mencionadas conversarán acerca de cómo los gobiernos se involucran con los mercados de carbono, en respuesta al creciente interés en torno al Artículo 6 y los mercados voluntarios de carbono. La sesión explorará hallazgos clave, ideas y tendencias de guías, informes y programas implementados por TNC, VCMI y Gold Standard sobre estos temas, seguida de una sesión de preguntas y respuestas con la audiencia. Podrá seleccionar el idioma de su preferencia (español o inglés) cuando se una al seminario web.

Contaremos con los siguientes panelistas:

• Lydia Sheldrake, Directora de Políticas y Asociaciones en VCMI
• Kavya Bajaj, Gerente de Relaciones Gubernamentales en Gold Standard
• Kelley Hamrick, asesora sénior de políticas de The Nature Conservancy
• Moderado por el director general de Ecosystem Marketplace, Stephen Donofrio

 

The Nature Conservancy: 

Article 6 Explainer (2023)
Article 6 of the Paris Agreement started a new era of carbon trading. Now, countries can invest and trade in carbon mitigation projects outside their borders to meet their nationally determined contributions (NDCs). In this report, the authors offer straightforward guidance on what Article 6 is, what was decided in 2022 at COP27, and what the future holds for Article 6. Questions addressed in the report include: Why have countries not yet started trading under Article 6? How do nature and REDD+ fit in Article 6? and How does Article 6 impact the Voluntary Carbon Market (VCM)?  

To Trade or Not to Trade (2023)
Article 6 of the Paris Agreement invites countries to collaborate through investments and trades in meeting their Nationally Determined Contributions and in raising global action towards limiting temperature rise to 1.5C by 2050. At the heart of international carbon trade accounting lies the concept of “corresponding adjustments,” which requires seller countries to subtract emission reductions and removals from their NDC before the buyer country adds the credits to their NDC target. In this report, the authors discuss key decisions around Article 6 trading, including how countries can evaluate the risks and opportunities of trading. The report also includes case studies of Article 6 implementation and details the debate around whether and how the voluntary carbon market intersects with Article 6 trading. 

Voluntary Carbon Markets Integrity Initiative (VCMI): 

The Voluntary Carbon Markets Integrity Initiative (VCMI) is an international non-profit organization with a mission to enable high-integrity voluntary carbon markets (VCMs) that deliver real and additional benefits to the atmosphere, help protect nature, and accelerate the transition to ambitious, economy-wide climate policies and regulation.  

It works to foster a shared vision for high-integrity VCMs to make a meaningful contribution to climate action while also supporting the achievement of the UN SDGs. VCMI connects, aligns with, and amplifies, initiatives that share this vision. 

On the demand-side, the VCMI Claims Code is a rulebook on how companies can make voluntary use of carbon credits as part of credible, science-aligned net-zero decarbonization pathways. It builds trust and confidence in how companies engage with VCMs, assisting them in making credible climate claims. On the supply-side, the VCM Access Strategy Toolkit provides guidance for countries to engage in high-integrity VCMs in support of national climate and economic prosperity. 

VCM Access Strategy Toolkit 

The VCM Access Strategy Toolkit provides guidance for countries to engage in high-integrity voluntary carbon markets (VCMs) in support of national climate and economic prosperity. 

Developed in partnership with Climate Focus and the United Nations Development Program (UNDP), the Toolkit sets out key considerations for host countries to aid decisions on whether, why, how, and when to engage with VCMs. 

Corporate commitments to climate targets are rising steeply, and with that, demand for high-quality carbon credits from credible projects. This Toolkit aims to help governments create an enabling environment to unlock this growing demand while maximizing the benefits of thriving, high-integrity VCMs for their country. 

The Toolkit is available to download from the VCMI Website: https://vcmintegrity.org/vcm-access-strategy-toolkit/

 

Gold Standard: 

Gold Standard was established in 2003 to manage robust standards to enable activities to deliver positive impact for climate change and sustainable development. With over 2700 projects applying our standard in over 100 countries across the world, we have to date been able to mobilise at least USD $36bn of shared value towards the UN Sustainable Development Goals. 

Following the adoption of the Article 6 rulebook, governments can use Gold Standard for the Global Goals to certify mitigation outcomes generated and transferred internationally under the Paris Agreement. New requirements and registry features allow for the management of authorised credits in line with international rules, while Gold Standard is building new procedures to share information across registries and with national focal points. 

Gold Standard’s thought leadership has shaped discussions on Article 6 by pioneering support mechanisms for the market, including the development of a helpdesk, guides and papers, and creating opportunities for peer-to-peer exchange through knowledge sharing platforms. As newer requirements to operationalise Article 6 emerge, Gold Standard is applying its expertise to support governments to prepare for its use while aligning our services to support impact in an evolving market.

Early Mover Programme (2022-2023) 

The adoption of the Article 6 rulebook at COP26 launched the groundwork for Article 6 implementation, initiating the journey towards high-integrity use of market mechanisms under Article 6 at scale. This called for governments and the private sector to build capacity, tools, and best practice approaches to translate the guidance into real-world action. In this context, Gold Standard, with support from the German government, implemented the recently concluded ‘Early Mover Programme’ to support and enable high integrity initial applications of Article 6 for host countries, project developers, and other stakeholders. The programme has been implemented with support from partners, through piloting, knowledge-sharing among project developers, and mapping the state of Article 6 preparations in major markets across the world. As we look to the future, steps taken by national governments could enable investment through carbon market activities that contributes to a growing, high-integrity carbon market with locally-shaped activities and benefits retained locally, if implemented effectively. 

18 July 2023 | Football for Forests, a joint initiative created by think tank Climate Focus and Planet League, is committed to the restoration of tropical forests through the unity and passion of the global
football community.

To achieve this goal, the Football for Forests app was created. It was  officially launched during an evening event at the Stadion An der Alten Försterei in Berlin, jointly hosted by Football for Forests represented by Dr Charlotte Streck, Director of Climate Focus, and the global initiative We Play Green, represented by Morten Thorsby, the Norwegian international and 1. FC Union Berlin Player.

Morten Thorsby expresses his commitment to the initiative and its underlying principles, stating, “Rainforests hold immense significance for humanity. I firmly believe that We Play Green and Football for Forests can harness the power of the global football family to protect these ecosystems. We all have a role to play!”

Dr Charlotte Streck emphasizes the urgency to take action, stating, “The statistics speak for themselves: 17 football pitches worth of forest are destroyed every minute, totalling more than 1,500 football pitches during a single football match. This is a drastic and cruel reality that underscores the fact that this is no longer a game. It is vital that we all step up and actively fight against the destruction of our forests, preserving our habitat.”

Do good, have fun!
The Football for Forests app brings together the concepts of doing good and having fun. In the Forest Restoration League, both individuals and companies can pledge a monetary amount for every goal scored by their favourite team throughout the football season under the banner of Join the Team and Save the Tropical Forests! They can then track in realtime which team becomes the champion of tropical forest restoration. The Forest Restoration League allows football fans, clubs, and corporate sponsors to compete against each other and support their team through forest restoration.

The founders rely on the passion and dedication of the worldwide football community, as Dr Charlotte Streck explains,

“Football for Forests provides a unique opportunity for everyone to actively participate in forest restoration. Every goal, every fan, every company and every sponsor helps restore forests. Not only that, Football for Forests makes reforestation enjoyable! I am confident that together we can achieve great things. If the global fan community doesn’t have the power to counter deforestation, then who does?”

To further mobilise the fan base in anticipation of the upcoming FIFA Women’s World Cup, Football for Forests has released a special edition of the app. As Australia and New Zealand jointly host the tournament, the Forest Restoration League will expand to include national teams participating in the event.

Transparency and Traceability as Top Priorities
Donations received through the app directly fund forest rehabilitation projects in the Amazon region, currently focused on Colombia with plans for future expansion into Brazil. Ensuring transparency and traceability of funds for the fans and sponsors is of utmost importance to the founders. Therefore, Julio Rozo Grisales, Project Leader at Amazonia Emprende, a partner organization of Football for Forests, will be present at the launch event to share insights into their on-site work in Colombia.

“Through tree planting, we have already restored 30 pitches in Caquetá, in the Colombian Amazon region. Everyone can contribute, we involve local communities in reforestation efforts and collaborate with youth groups through a forest school, known as Escuela de Bosques. We aim to create awareness and sensitize all population groups to this issue, harnessing the power of the local community to protect our forests,” emphasizes Julio Rozo Grisales.

Prominent Support from Politics, Business and the Wider Society
Even before the official launch, Football for Forests has garnered broad support from politics, business and society. The Federal Foreign Office, represented by Jennifer Morgan, State Secretary and Special Envoy for International Climate Policy, has assumed patronage for today’s launch.

Jennifer Morgan underscores the importance of teamwork and collective effort in both football and climate diplomacy, stating, “As the Federal Foreign Office, we support the Football for Forests initiative, merging the enthusiasm for football with efforts for climate protection and tropical forest restoration.”

Several prominent individuals are also endorsing the initiative. Philipp Köster, journalist, football expert and founder of the magazine “11FREUNDE,” will host the evening’s event and moderate conversations between renowned personalities such as Elin Linnéa Landström, Swedish professional footballer and player of AS Roma; Rachel Corboz, French-American professional footballer and player of Stade de Reims; and Almuth Schult, former professional footballer and TV expert. Almuth Schult supports Football for Forests as an ambassador along with many other notable figures, including Tabea Kemme, former professional footballer and Women’s World Cup pundit for the upcoming tournament in Australia and New Zealand.

Philipp Köster expresses his enthusiasm for the project, stating, “I know how much football moves people. I am thrilled that this passion, usually seen on the pitch and in the stands, is now directly contributing to the vital protection of tropical forests!”

Almuth Schult shares her excitement, highlighting the collective impact beyond the pitch: “When players come together, they can have a significant influence on issues beyond the game. By working together, we can make a tangible contribution to the preservation and reforestation of rainforests. I am delighted to be part of the We Play Green team and support the Football for Forests initiative.”

Tabea Kemme reinforces the importance of individual responsibility as an ambassador for the initiative, stating, “We all need to take a stand and take action, and Football for Forests provides a platform to do just that. Download the app and get involved. Every goal counts, and everyone can contribute to making a difference.”

For more information about Football for Forests, please visit:
https://footballforforests.org/

Please note this article originally appeared in Forest Trends: https://www.forest-trends.org/blog/6-new-indigenous-territories-officially-recognized-in-brazil/

1 May 2023 | Friday was a historic day in Brazil for indigenous peoples and the planet. President Lula demarcated 6 new indigenous territories totaling just over 2,300 square miles (612,000 hectares), with 90 percent of that area in the most remote parts of the Amazon. To give you a picture, this area is equivalent to about half the size of Jamaica or a little larger than the US state of Delaware. The peoples of Arara do Rio Amônia, Kariri-Xocó, Rio dos Índios, Tremembé da Barra do Mundaú, Uneiuxi, and Avá-Canoeiro territories can now begin the process of legal recognition and protection for their lands.

These lands are the foundations of indigenous cultural identities and traditional ways of life, and without the protection provided by land demarcation, these communities are at risk of losing their homes, cultures, and livelihoods. Indigenous peoples have long been the first line of defense against illegal activities, such as logging, mining, and ranching. Lula’s decree grants indigenous peoples exclusive rights to the natural resources in these areas, bans all mining, and increases regulations on commercial farming and logging.

We hope this sends a strong signal to illegal actors that indigenous rights are respected at the highest levels of Brazilian government and will be protected. We also reiterate our commitment to support indigenous peoples in Brazil and beyond in securing their rights and supporting strong governance of their forest homelands.

Legal demarcation doesn’t just help protect indigenous rights; it can help increase the stability territories need to focus on developing their own economies. Indigenous peoples are already poised to become leaders in scaling Brazil’s bioeconomy, where a network of sustainable forest-based enterprises for products like açaí, Brazil nuts, and cacao feed into national and international markets, helping squeeze out economic models that drive deforestation, such as large-scale soy and cattle production.

Official government recognition can also help communities attract and secure direct funding from global climate and conservation finance programs. When guided by Free, Prior, and Informed Consent and other safeguards, such programs can help communities support their own long-term visions for strong, resilient livelihoods and cultural preservation.

This is a unique window of opportunity to keep recognizing the rights of indigenous peoples as Brazilians and develop policies and incentives that center on and acknowledge their role as front-line forest protectors. This is so far reflected in leadership Lula has appointed across agencies: the first ever Ministry of Indigenous Peoples is being led by Sônia Guajajara; Marina Silva as Minister of Environment for the second time (her first term was from 2003-2008); and Garo Batmanian as head of the Brazilian Forest Service. We feel hopeful that these are real signals that the Lula administration will make good on its commitments to indigenous rights and environmental conservation and are already using this momentum to ramp up support to our indigenous partners across Brazil.

For more information:

What Brazil’s new government means for indigenous and local forest-based economies

BBC: Brazil’s Lula recognises six new indigenous reserves

g1 globo: Lula demarca terras indígenas em seis estados; veja detalhes das áreas

Please note this article originally appeared in Forest Trends: https://www.forest-trends.org/blog/7-ways-to-scale-up-nature-based-solutions-for-water-security-takeaways-from-the-first-un-water-conference-in-46-years/

1 May 2023 | Last week we were honored to gather experts and practitioners at the Nature Hub in New York City during the UN Water Conference – the first in 46 years – to share lessons learned on scaling up nature-based solutions (NBS) for water. The main aim of the conference this year was to accelerate action to achieve Sustainable Development Goal (SDG) 6: Ensure access to clean water and sanitation for all by 2030. The Nature Hub, located a short walk from UN Headquarters, aimed to ensure that nature was considered as part of the UN’s agenda and to gather practitioners of NBS to share their experiences (co-hosted by Forest Trends, The Nature Conservancy, WWF, IUCN, World Water Council, International Water Management Institute, International Network of Basin Organizers). As co-hosts and organizers of two events, we were proud to help elevate NBS on a global stage.

While there are many successful cases of NBS, experience is limited when it comes to bringing these solutions to scale, which we will need to meet global climate goals. Matching the scale of NBS’ potential to support water security with action on the ground will require a new set of strategies on policy, finance, and implementation. Fortunately, early adopters are starting to generate valuable lessons for scaling up NBS for water security. Peru has made particularly remarkable progress, with a 12x increase in NBS investments implemented over the last decade.

From left to right: Boris Ochoa-Tocachi (moderator, CEO of ATUK Consoltoría Estratégica & Hydrology Advisor to Forest Trends), Patricia Abreu Fernández (Executive Director of the Santo Domingo Water Fund in the Dominican Republic), Rebecca Davidson (Senior Director of Conservation Programs at the National Forest Foundation), Seth Schultz (CEO of Resilience Rising), Cyrille Barnérias (Director of International Relations, France’s Biodiversity Agency (OFB)), Vincent Lee (Associate Principal and Technical Director of Water, ARUP)

Our experience supporting watershed investments includes work in Bolivia, Brazil, Peru, Mexico, Ghana, China, and the US. Our work to mainstream and scale NBS since 2017 has primarily been focused on Peru through the Natural Infrastructure for Water Security (NIWS) project, supported by USAID and the Government of Canada. Together with our partners, we have been working to scale-up gender-sensitive investments in natural infrastructure in Peru as a strategy to regulate water supply and increase resilience to climate change. There is now more than a quarter billion dollars committed to new investment in NBS for water in Peru, secured with our support. (Sign up here to receive updates on our upcoming report series: Lessons Learned in Scaling Natural Infrastructure in Peru).

Likewise, experiences bringing NBS to a national scale in France, addressing systemic wildfire risk to watersheds in the western US, cross-sector efforts to conserve the watersheds of large cities, like Santo Domingo, Dominican Republic, and installing urban green infrastructure in New York City, have begun to yield important lessons on the key elements and challenges for building the scaffolding needed for scale.

Our speakers last week shared their most important takeaways from those experiences, which we have combined here with our own from Peru:

1) We need to leverage rising global ambition on NBS to keep driving the funding and systemic change that will enable adoption across sectors.

Tri Linggoatmodjo, Senior Project Management Specialist at USAID Indonesia, emphasized the importance of the opportunity presented by rising global ambition on NBS for water security. She said that they have discovered the value of NBS to improving WASH (Water, Sanitation, and Hygiene) efforts in Indonesia and sustainable land management upstream for safer, cleaner water downstream. At the same time, she has observed the evolution of the US Government’s strategies to directly support NBS as critical to water security and climate resilience (e.g., US Government Global Water Strategy and USAID’s Climate Change Strategy). And this is only one country –  142 countries include NBS in their nationally determined contributions (NDCs), and 124 of them specifically mention increased water security as a key outcome. At least four more additional countries announced new action items related to NBS during the UN Water Conference.

These examples all show that NBS are poised to scale. However, reaching the scale needed to support water security will require us to work differently than we have in the past – we need to look to new strategies on policy, planning, finance, capacity-building, and implementation.

Tri Linggoatmodjo, Senior Project Management Specialist at USAID Indonesia giving her opening remarks on March 23rd at the Nature Hub, New York City

2) We need to clarify how we are defining NBS before we make commitments and execute projects.

As we work to scale NBS, many institutions that have historically focused on gray infrastructure, such as utilities, governments, and landowners, are just getting to know the concept.

As Cyrille Bárnerias, Director of International Relations for France’s Biodiversity Agency (OFB), pointed out, it can be surprising how different our definitions of NBS are across sectors and institutions. It’s worth taking time to clearly define terms and hear each other’s understandings. More of their reflections here.

3) Our systems are not incentivized to report on or learn from failure, leaving much to individual champions of NBS to navigate systems that were not designed with adaptation in mind.

Doing anything for the first time requires intention and humility to navigate the unknown and learn from what inevitably doesn’t go as planned. As Seth Schultz of Resilience Rising pointed out, some key actors in scaling NBS, such as engineers and city planners, have little incentive to change the way they have been operating for decades – it’s hard to be the first one to stick your neck out, make a change, and incur the potential risk of doing so.

That said, Gena Gammie, Director of Forest Trends’ Water Initiative, reinforced that NBS are not necessarily more risky than grey infrastructure, but incorporating NBS does require our practitioners and institutions to learn to think differently about risk. And to confront the risk of not changing how we design infrastructure for water – our engineered solutions of the 20^th century are aging and already consistently failing to meet the needs of people and landscapes, and this does not even account for the continued uncertainties in weather and water supply widely expected by climate change. She further notes that in Peru, they came to embrace an unavoidable element of “learning by doing” that has ultimately served them well on their journey to mainstreaming NBS.

Vincent Lee, Associate Principal and Technical Director of Water from engineering firm ARUP, recounted his experience implementing NBS in New York City; they were directed to four different city departments as they tried to acquire proper permits and permissions – no one felt they were responsible for or “owned” NBS or didn’t want to. While they ultimately succeeded in installing roadside bioswales across over 1,300 acres in the city, the process opened his eyes to the need to use their experience to help create a more streamlined process for future practitioners and decision makers. And a sense of ownership and excitement about the potential of NBS.

4) The systems change we need to mainstream NBS requires peer-to-peer learning experiences and exposure to what success can look like.

Mónica Altamirano, Director of Climate Impact at WaterEquity, noted that NBS are starting to face challenges similar to those experienced by the broader water sector, and that we can and should learn from each other.

Some of the discomfort of “learning by doing” can be relieved by peer-to-peer exchanges. Talking to someone who has been through an unfamiliar process helps newcomers feel that they can navigate it, too. Officials in Lima, Peru learned about NBS implementation from counterparts in Quito, Ecuador and visited project sites. Practitioners in New York City learned from case studies in Portland and Seattle in Washington state.

Gena Gammie, Director of Forest Trends’ Water Initiative, setting the stage for panel discussion with lessons learned from the Natural Infrastructure for Water Security Project in Peru

5) Institutions need to develop processes for NBS with clear guidelines and technical specifications and build capacity for using them across sectors.

Gena, Seth, and Vincent all emphasized that we will also need standards and codes to guide practitioners and decision makers as they shepherd NBS through design, procurement, and implementation. Doing so ensures institutions are capturing what they are learning and laying the foundation for quality control and effective implementation over the long term.

One powerful example from the NIWS project in Peru was a manual for water utilities to formulate and evaluate public investments in natural infrastructure that, when used, reduced the time from idea to agreement by 80%. Other guidelines and tools compiled the best available science accessibly to ensure it was actionable for practitioners and decision makers.

The NIWS project also applied management and technical trainings with NBS funders and contractors to connect professionals across disciplines, building the market and a learning community. Graduates of the programs increased project design skills and learned how to incorporate natural infrastructure into public planning, budgeting, and prioritization processes.

6) Funders and standards need to remain flexible enough to allow NBS to be responsive to local needs.

Rebecca Davidson, Senior Director of Conservation Programs at the National Forest Foundation, highlighted how critical it is in their work in the western US to have the flexibility to treat each NBS as completely unique: “No square foot of a watershed is the same, just as no community is the same, so our projects need to reflect that.”

Patricia Abreu Fernández, Executive Director of the Santo Domingo Water Fund in the Dominican Republic, echoed that message in her stories of working with landowners on the island and needing to turn on a dime to not only educate them on NBS, but design custom solutions, all while keeping the big picture of national water security in mind. What’s more, landowners who became NBS advocates helped spread interest across their community through word of mouth and demonstrated improvements to their livelihoods.

7) We must adapt our systems to reduce barriers to participation and increase benefits to local communities.

As primary stewards of our landscapes, local communities are key partners to any NBS. They hold traditional knowledge that is critical to successful design, implementation, monitoring, and long-term maintenance of NBS investments. They need to be engaged as equal partners from day one. However, many NBS planning and implementation processes are not accessible to local communities.

Gena pointed out that in some cases in Peru, NBS takes the form of restoring traditional water management practices, like amunas (pre-Incan infiltration canals), which not only help store and release water during times of shortage at regional levels but increase local benefits and revalues local knowledge. However, current public investment structures in Peru are not set up to work directly with local communities on NBS. Public procurement policy required communities to enter a lengthy competitive bid process and provide project insurance – a massive barrier for most small communities, even if they wanted to participate. Addressing this will require a transformation in sectors that are designed to build dams, for example, not consider communities as equal partners or restore their traditional infrastructure.

Preparing to make big changes

A key lesson from Peru was to recognize the limitations of existing implementation mechanisms. Doing so helped set expectations about those limitations and move forward with clearer alignment and understanding of goals and what NBS could and could not achieve in a given context. It also opened the door to creativity – where appropriate, they explored and developed alternatives that could be more agile, equitable, and sustainable than public investment systems.

In her closing remarks, Mónica reminded the audience that all these shifts we need to make in our existing systems to enable NBS may not always be possible, and we may need to design new ones: “if that feels like trying to ‘fit a square peg in a round hole,’ we may need to rethink how to fundamentally shift our model of development toward more empowered participation.” We’ll need these kinds of fundamental shifts to scale-up and sustain not only NBS, but the range of solutions and partnerships needed to hit our SDG 6 targets and build resilience in the face of a changing climate.

Mónica Altamirano, Director of Climate Impact at WaterEquity giving closing remarks. March 23rd, Nature Hub, New York City

Please note this article originally appeared in Carbon Pulse: https://carbon-pulse.com/193444/

15 March 2023 | We’ve come a long way since 1979, when leading scientists from around the world first formally warned that deforestation was a significant contributor to global climate change.

The interactions between human activities, terrestrial ecosystems, and the atmosphere are complex and dynamic, and it took a while before frameworks were in place to account the benefits of climate actions in the agriculture, forestry and other land use (AFOLU) sector. Some of the original guidance on project-based AFOLU activities was published by the IPCC in 2000.[1]

By 2010, the science had advanced enough to create financing mechanisms for “REDD,” which stands for “Reducing Emissions from Deforestation and forest Degradation.” Voluntary carbon market finance supporting REDD activities depends on effective forest conservation, and on appropriate and reliable tools for measuring and accounting the benefits of climate actions– called “carbon methodologies.”

Just as our understanding of climate science continues to advance, carbon methodologies likewise must not be static constructs, but rather must continue to evolve and improve in step with advancements in knowledge and technology. The development and refinement of carbon methodologies is a deliberate and ongoing process involving research, testing and critical evaluation, and draws on the contributions of researchers, practitioners, auditors and the standards that administer them. This process doesn’t involve replacing or invalidating established approaches, but instead building on and improving them over time.

Prior to the establishment of formal REDD methodologies, Sandra Brown, a leading pioneer in forest carbon science and mentor to many, led a team of researchers testing approaches to set REDD baselines in a wide range of landscapes. Their findings were published in 2007 in Mitigation and Adaptation Strategies for Global Change[2], and were later incorporated into some of the first REDD methodologies approved by the Verified Carbon Standard (VCS) in 2010.

While those first REDD methodologies reflected the best available science at the time, they did not represent an end point. Since then, the methodologies have been progressively refined as new science became available. As an example, an integral part of REDD baselines involves predicting deforestation risk at small scales (“risk mapping”). As predictive models continued to be improved, together with advancements in satellite sensors and classification techniques of land cover change, researchers at Clark University, led by Gil Pontius, published new findings and recommendations regarding how model goodness-of-fit should be evaluated[3]. These recommendations, and new metrics to evaluate model reliability, were subsequently incorporated into the methodologies as revisions, improving confidence in this aspect of baseline setting. The soon-to-be released consolidated REDD methodology developed under Verra’s VCS Program represents the latest step in this process to draw on the latest science to build on and strengthen methodologies.

This active interface with the latest science has led to important innovations making possible carbon accounting of new AFOLU activities. With The Nature Conservancy, TerraCarbon developed the first standardized method for baseline setting in the AFOLU sector in the VCS Reduced Impact Logging (VM0035[4]) methodology. The methodology, approved in 2015, was based on extensive research in East Kalimantan, Indonesia, led by Bronson Griscom and Peter Ellis, published in Global Change Biology in 2014[5]. Informed by new research initiatives, the geographic scope of the methodology has been expanded incrementally to include new forest landscapes, including the Yucatan peninsula of Mexico, Republic of Congo and Suriname (the last two in development).

More recently, TerraCarbon has led the introduction of new impact evaluation approaches to carbon methodologies, involving direct observations in matched controls to produce dynamic baselines. This work was preceded and informed by a research effort undertaken by TerraCarbon and colleagues from North Carolina State University, IMAZON and Duke University, piloting the application of the Synthetic Control Methodology (SCM) in Brazil, to evaluate the avoided deforestation impact of the Green Municipalities Program administered by the state of Para, and published by Erin Sills and her team in PloS ONE in 2015[6]. Dynamic approaches like SCM and nearest neighbor matching offer important improvements over baselines that rely on fixed historic assumptions. Because controls representing the baseline are observed ex post using dynamic approaches, and are subject to the same externalities like policy, markets and climate as the project, dynamic approaches have the potential to better resolve and attribute impacts back to the actions that produced them, the central aim of any carbon methodology. We have incorporated dynamic approaches in the American Carbon Registry’s Restoration of Pocosin Wetlands methodology[7] approved in 2017, in the VCS Methodology for Improved Forest Management (IFM) Using Dynamic Matched Baselines from National Forest Inventories (VM0045[8]), approved in 2022, and in the upcoming VCS Methodology for Afforestation, Reforestation and Revegetation (ARR) Projects.

Dynamic approaches like these deserve serious consideration more broadly in the AFOLU sector, and have the potential to make valuable contributions in accounting for REDD, that can build on or complement existing approaches. TerraCarbon maintains our commitment to support the work of Verra and other voluntary carbon standards in their continual effort to critically evaluate and improve carbon methodologies. New approaches, however, require testing to determine their appropriateness across varying circumstances, and to this end, TerraCarbon will be working with partners over the next year to pilot applications of dynamic baseline approaches in the context of REDD across a range of forest landscapes, evaluating the benefits they can offer. We plan to share the results publicly, and where they show promise we will solicit broader engagement on how they can be integrated into, and strengthen the integrity of, existing accounting frameworks, including emerging jurisdictional baselines.

Non-market approaches that rely on public and philanthropic funding have been insufficient to stem global deforestation and its contribution to climate change.  Market-based approaches, that are results-based and supported by sound accounting methods, are crucial to expanding and scaling finance from public and private sources to protect the world’s remaining forests. The ongoing need to evaluate and refine accounting methods, incorporating new data and new understanding, is not a fatal flaw in the market. Rather it is a natural and essential process that we will support so that market-based finance can be delivered more efficiently and urgently to fight climate change and conserve forests around the world.

 

 

[1] Brown, S., Masera, O., & Sathaye, J. 2000. Project based activities. In R. T. Watson, I. R. Noble, B. Bolin, N. H. Ravin-dranath, D. J. Verardo, and D. J. Dokken (Eds.), Land use, land-use change and forestry: A Special report of the IPCC(pp. 283 – 338). Cambridge: Cambridge University Press

[2] Brown, S. et al. 2007. Baselines for land-use change in the tropics: application to avoided deforestation projects. Mitigation and Adaptation Strategies for Global Change, 12, pp.1001-1026.

[3] Pontius Jr, R. G. (2018). Criteria to Confirm Models that Simulate Deforestation and Carbon Disturbance. Land, 7(3), 14.

R G Pontius Jr, et al. 2008. Comparing input, output, and validation maps for several models of land change. Annals of Regional Science, 42(1): 11-47.

R G Pontius Jr et al. 2007. Accuracy assessment for a simulation model of Amazonian deforestation. Annals of Association of American Geographers, 97(4): 677-695.)

[4] https://verra.org/methodologies/vm0035-methodology-for-improved-forest-management-through-reduced-impact-logging-v1-0/

[5] Griscom, B., Ellis, P. and Putz, F.E., 2014. Carbon emissions performance of commercial logging in East Kalimantan, Indonesia. Global Change Biology, 20(3), pp.923-937.

[6] Sills, E.O., Herrera, D., Kirkpatrick, A.J., Brandão Jr, A., Dickson, R., Hall, S., Pattanayak, S., Shoch, D., Vedoveto, M., Young, L. and Pfaff, A., 2015. Estimating the impacts of local policy innovation: the synthetic control method applied to tropical deforestation. PloS one, 10(7), p.e0132590.

[7] https://americancarbonregistry.org/carbon-accounting/standards-methodologies/greenhouse-gas-benefits-of-pocosin-restoration

[8] https://verra.org/methodologies/methodology-for-improved-forest-management/

30 January 2023 |Corporate interest in protecting biodiversity has accelerated considerably in the last five years, according to the latest Supply Change data.

Biodiversity is under serious threat from human activities like agriculture, pollution, and overexploitation. Because biodiversity underpins well-functioning ecosystems and provides essential services (“ecosystem services”) that human society relies on, such as crop pollination, rainfall patterns, soil fertility, and flood prevention, the loss of biodiversity is a serious threat to the global economy. Nonetheless, biodiversity has historically been a “silent crisis,” frequently overshadowed in political and corporate activities by comparatively serious threats like climate change.

However, the silent biodiversity crisis is starting to make some noise.

The United Nations’ Convention on Biological Diversity’s Fifteenth Conference of Parties’ (COP15) concluded on December 19 with governments striking a historic deal to protect thirty percent of Earth’s terrestrial and marine areas, restore thirty percent of degraded ecosystems, and reform environmentally harmful subsidies.

Companies, too, are increasingly acknowledging the role they play in driving biodiversity loss, and they are embarking on efforts to avoid, mitigate, minimize, and compensate for their negative impacts on biodiversity. Biodiversity loss and deforestation are closely linked issues; habitat loss is the most significant cause of species extinctions, and the conversion of tropical forests to produce forest-risk commodities, like cattle, palm oil, and soy, is the leading cause of terrestrial biodiversity loss globally. Addressing deforestation will be a crucial component of any larger biodiversity protection policy for companies that source and produce forest-risk commodities.

Over the past five years, Supply Change has observed an explosion in the number of companies aiming to protect biodiversity as part of their commitment to reduce or eliminate deforestation in their forest-risk commodity supply chains.[1] Data gathered in late 2021, featured in part one of Supply Change’s two-part report series published in 2022, show that over three-quarters (76 percent) of companies researched included a biodiversity protection statement in at least one commitment. 

This is a considerable jump from just five years ago. Supply Change data show that in 2018, only about half of these companies had biodiversity statements, and Supply Change’s 2017 annual report stated that only 37 percent of companies researched had a biodiversity statement.

Companies’ statements on protecting biodiversity are often general, but they occasionally provide specifics about the aspects of biodiversity they are most concerned with protecting and how they are implementing (or planning to implement) these protections, beyond preventing habitat destruction by tackling commodity-driven deforestation.

For example, out of 94 companies aspiring to protect biodiversity, about a third pledged to protect endangered species, and 18 percent pledged to avoid sourcing from or producing in protected or biodiversity priority areas. A handful of companies included language on protecting native ecosystems, providing funding or other support to conservation organizations, protecting ecosystem services, protecting intact landscapes, achieving net gain or no net loss of biodiversity, and reducing forest fragmentation.

The growing awareness of the seriousness and urgency of the risks from biodiversity loss to companies’ operations and profits may be the reason for this increase.

Biodiversity underpins natural systems, which provide ecosystem services that human society relies on. These services are often taken for granted, but are enormously valuable. They are worth roughly $130 trillion annually, which is more than 1.5 times the annual global GDP. Accordingly, the World Economic Forum has consistently ranked biodiversity loss among the top three biggest threats facing humanity in the next ten years, in terms of likelihood and severity of impact. Because they source agricultural and forestry products, the companies tracked by Supply Change are especially vulnerable to business impacts from biodiversity loss.

Lower yields in agricultural and forestry industries from degraded ecosystem services cause supply shortages, price fluctuations, and increased costs, both for companies directly producing agricultural and forestry commodities and companies that source these commodities to create products for end consumers. Companies may also have to contend with increasing costs from damaged transportation and other infrastructure from worsening natural disasters.

Consumer-facing (downstream) companies are especially vulnerable to reputational damage, often in the form of negative publicity from media and advocacy groups. Biodiversity loss is a powerful invoker of strong public sentiment; negative impacts to the cute and fuzzy faces of iconic species, like tigers or orangutans, tug on our collective heartstrings and can influence consumer and corporate customer buying practices. The human impact of companies’ activities on biodiversity may also undermine their efforts to protect human rights and wellbeing and invoke negative public sentiment; biodiversity loss is also detrimental for indigenous peoples and local communities, an issue that has received growing attention in recent years.

The growing threat of regulatory risk (e.g., increased costs of complying with government regulations related to biodiversity protection) and jeopardized access to investment capital may also be a motivating factor for companies to act on biodiversity. This enables them to identify and implement the most cost-effective strategy on their own timeline, before they are legally required to. The global agreement finalized at COP15 last month, for example, includes targets for companies to assess, monitor, and disclose the impacts of their operations and supply chains on biodiversity. Pressure to act may also come from other private sector actors, such as corporate customers and financial institutions with stricter biodiversity-related procurement or investment standards. For example, last month, a group of eleven investors launched a campaign called Nature Action 100, which will engage the 100 companies with the highest impact on nature to help them minimize their impacts and address biodiversity loss.

As companies increasingly broadcast their biodiversity protection intentions, various organizations have released tools and guidance documents to help companies measure and mitigate their impact on biodiversity. For example, in 2020, the Natural Capital Impact Group (a collaboration between the University of Cambridge’s Institute for Sustainability Leadership and several major corporations, including Kering, Mars, and Asda) released the Biodiversity Impact Metric guidance document, which provides guidance for companies on measuring biodiversity impacts and setting appropriate targets to reduce these impacts.

More guidance on measuring and managing biodiversity impacts is forthcoming. The Science-Based Targets Network (SBTN), which has been a major force in supporting the establishment of targets to reduce greenhouse gas emissions in companies’ operations and supply chains, is currently developing guidance for companies to set appropriate targets to reduce, eliminate, and even reverse biodiversity loss in their operations and supply chains. The SBTN’s guidance for measuring biodiversity impacts will likely be based on a combination of existing methodologies, such as the Species Threat Abatement and Restoration (STAR) metric and the land occupancy methodologies, designed to calculate baseline measurements and establish appropriate improvement targets that adhere to the mitigation hierarchy principles (i.e., avoiding and minimizing impacts on biodiversity are preferrable to restoring and offsetting biodiversity loss). Indicators will cover the connectivity and integrity of ecosystems, the percentage of species threatened with extinction, and the abundance of species.

But companies don’t have to wait for additional guidance on measuring and mitigating biodiversity impacts to make progress towards their biodiversity protection objectives. For many companies, especially those producing or sourcing forest-risk commodities, avoiding and minimizing habitat destruction in their operations and supply chains is guaranteed to be a major feature of any biodiversity protection strategy, and something that current and forthcoming guidance will undoubtedly flag as a high priority. Existing guidance, such as the Accountability Framework, which outlines best practices for establishing targets for deforestation and conversion-free supply chains, supply chain management, land management, and other deforestation-related policies and practices, can help companies get started on reducing biodiversity loss in their operations and supply chains.

Given the growing number and urgency of internal and external factors pushing companies to act to reduce their impacts on biodiversity, Supply Change expects that its ongoing and future research will continue to reveal even more companies taking steps to protect biodiversity, integrate biodiversity-specific targets with existing deforestation-focused strategies, and report additional implementation and impact information on their efforts to address biodiversity loss in their operations and supply chains.

For more information on our latest reporting, please see supplychange.org.

 

 

[1] Supply Change tracks corporate commitments that target reducing/eliminating deforestation from the production and sourcing of five commodities: cattle, cocoa, palm oil, soy, and timber and pulp.